Judgment

VAIDIALINGAM, J.:- These two appeals, on certificate, by the Commissioner of Income-tax (Central) new Delhi, are directed against the common judgment and order dated February 21, 1967 in Income-tax Reference No.7 of 1961. The reference related to the assessment years 1942-43 and 1943-44. The question of law, referred for the opinion of the High Court under Section 66 (1) of the High Court under Section 66 (1) of the Indian Income-tax Act, 1922 (hereinafter to be referred to as the Act) was as follows:

"Whether on the facts and circumstances of the case, the profits and gains in respect of the sales to the Government of India, were received by the assessee in the taxable territories."

2. The High Court answered the said question in favour of the assessee as follows:

"On the facts and circumstances of the case, the profits and gains in respect of the sales, made to the Government of India, must be deemed to have been received by the assessee outside the taxable territories."

3. When Mr. R. H. Dhebar, learned counsel for the Revenue opened the appeals, a preliminary objection was raised by Mr. N. D. Karkhanis learned counsel for the asseseee-respondent that the certificates granted by the High Court are not proper and as such the appeals are not maintainable. The nature of the preliminary objection will be referred to by us in due course. As we are accepting the preliminary objection, we will only refer to the facts in so far as they are relevant for holding that the certificates granted are not proper and as such the appeals are not maintainable.

4. The assessee-respondent is a firm consisting of three partners, namely, Sohanmal, Mehtabchand and Allahdin. Sohanmal and Mehtabchand are also the two coparceners of a Hindu Undivided Family. The said family had got its own business firm known also by the name of the assessee, M/s. s. Zoraster and Company The assessee firm, as well as the joint family firm were both situated in Jaipur, which was outside the taxable territories at the relevant period, the assessee had business dealings with the Government of India. In respect of the goods supplied by the said firm, the Government of India paid the price by cheques. The cheques in question were received by the assessee at Jaipur. However, the said cheques were drawn on the Reserve Bank of India, at Bombay. The assessee, through the agency of the family firm, sent those cheques to Bombay for collection and realised the amounts due under the cheques at Bombay. The question arose whether the amounts represented by the cheques which were cashed at Bombay, were taxable in the hands of the assessee under the Act. The Income-tax Officer, the Appellate Assistant Commissioner, as well as the Appellate Tribunal held that as the amounts had been realised in Bombay, which is a taxable territory, the amounts covered by the cheques were liable to tax under the Act.

5. On an application made by the assessee, the Appellate Tribunal made a Reference on December 10, 1952 to the High Court of judicature for the State of Punjab at Simla. The question of law, that was referred to the High Court was one, which we have set out in the earlier part of the judgment. The Reference was numbered as Civil Reference Case no. 3 of 1953 in the Punjab High Court. As in the opinion of the High Court, the appellate Tribunal had not given a finding as to whether the cheques in question were sent to the assessee by post and whether the assessee had given any direction in that regard to the Government of India, by its order dated March 24, 1955, a supplementary statement was called for. The assessee challenged this order of the High Court calling for a supplementary statement in an appeal before this Court. By its order dated August 17, 1960 this Court dismissed the said appeal. The decision of the Court is reported in Zorastar & Co. v. Commr. of Income-tax, (1960) 40 ITR 552 . After the decision of this Court, the Appellate Tribunal, on March 18, 1961 submitted to the Hig